The Canadian dollar closed lower Friday after surging well over a full cent the previous session amid a growing likelihood that the U.S. Federal Reserve’s monetary policy will remain loose for the time being.

The loonie edged down 0.1 of a cent to 96.19 cents (U.S.).

The loonie’s gain of 1.21 cents came in the wake of reassurances from Fed chairman Ben Bernanke that the central bank was in no hurry to curtail key economic stimulus measures.

The day's final numbers are shown on an information board above the floor of the New York Stock Exchange shortly before the closing of the market in New York, July 11, 2013. The S&P 500 index and the Dow industrials closed on Thursday at record highs, a day after Federal Reserve Chairman Ben Bernanke said the U.S. central bank will keep a loose monetary policy for some time to lower the unemployment rate.
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Market View

A Wells Fargo sign is seen outside a banking branch in New York in this July 13, 2012, file photo. Wells Fargo & Co said fourth-quarter profit rose 24 percent to a record high as the bank set aside less money to cover bad loans and made more fees from mortgages, January 11, 2013. REUTERS/Shannon Stapleton/Files (UNITED STATES - Tags: BUSINESS LOGO)
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Market View

The greenback fell sharply after Bernanke said that the U.S. needs a “highly accommodative monetary policy,” or low interest rates, for the foreseeable future. The Fed is buying $85-billion a month in bonds to keep interest rates low.

Traders also looked ahead to next Wednesday and the next interest rate announcement and monetary policy report by the Bank of Canada. It will be the first policy decision by Stephen Poloz since he took the helm at the central bank in early June.

“To this point, there have been very few appropriate times for the governor to play his cards,” observed Ian Pollick, fixed-income strategist at RBC Dominion Securities. “And it will be very telling how he characterizes both the current economic situation, as well as how he might potentially change the forward-looking language.”

Analysts expect the Bank of Canada to leave its key rate unchanged at 1.25 per cent until well into 2014 at least.

Signs of higher demand in the U.S. pushed the August crude contract on the New York Mercantile Exchange up $1.04 to $105.95 a barrel, up 2.6 per cent for the week.

Copper prices were depressed after China’s Finance Minister suggested that growth could come in at 7 per cent for this year, which is below the government’s official forecast.

Surprisingly weak trade figures earlier this week raised the prospect that China’s slowdown will be sharper than anticipated as China’s central bank tightens credit to reduce financial distortions. China releases April-June growth figures on Monday morning and that could well determine trading next week.

The September copper contract on the Nymex lost 2 cents to $3.15 a pound.

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